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Nursing home studies focus on the costs of staff turnover rates and selective admission of patients

Research Activities, March 2010, No. 355

The oft-lamented high staff turnover rates in nursing homes, linked to poor quality of care, actually net cost savings for these homes, according to a new study. A second study found little evidence that nursing homes selectively admit healthier patients in order to improve their national quality report card standings. The first study was led by William D. Spector, Ph.D., of the Agency for Healthcare Research and Quality (AHRQ), and the second study was led by Dr. Spector and AHRQ colleague Rhona Limcangco, Ph.D. Reprints of the first (Publication No. 10-R002) and second (Publication No. 10-R004) studies are available from the AHRQ Publications Clearinghouse. Both studies are briefly discussed here.

In this study, the researchers estimated the net costs associated with staff turnover in 902 California nursing homes during 2005. The turnover rate of direct care staff averaged 62 percent. A calculation was made for the marginal cost of turnover. According to the researchers, an increase in turnover of just 10 percent results in $170,000 for an average nursing home—a 2.9 percent cost savings. A nursing home choosing between operating at the 25th percentile versus the 75th percentile of turnover, i.e., between 38 percent and 78 percent, would experience cost savings of $668,252, assuming all other factors are held constant. The net cost savings associated with nursing home staff turnover may explain its persistence over the past decade, despite the many policy initiatives to reduce it, note the study authors. They point out that future policy efforts need to recognize the complex relations between staff turnover and costs.

The authors of this study investigated the practice of "cream skimming," also known as "cherry picking" in nursing homes. In this practice, patients are admitted who are less frail and sickly—individuals less likely to experience poor outcomes and negatively impact published nursing home care quality scores. During 2001 to 2005, the investigators looked at all non-Medicare patients admitted to 16,745 nursing homes across the country. They analyzed various patient characteristics, including pain at time of admission, memory limitations, diabetes, and pressure ulcers. They found little evidence of cream skimming among the nursing homes studied. Even when evidence was found for not selecting patients with pain and memory limitations, the effect was not large. Although anticipated by the researchers, there was no evidence of cream skimming among high-occupancy facilities.

Page last reviewed March 2010

Internet Citation: Nursing home studies focus on the costs of staff turnover rates and selective admission of patients: Research Activities, March 2010, No. 355.
March 2010. Agency for Healthcare Research and Quality, Rockville, MD. http://archive.ahrq.gov/news/newsletters/research-activities/mar10/0310RA18.html

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